Tuesday, 24 August 2010

16:06 BST - SPX Update: 15 min pitchforks

I mentioned this morning how price action yesterday seemed to be confirming the validity of the red fork on the 15 min chart (see here). Well, what we've seen today also seems to be validating it as an important fork to watch:

SPX 15 min pitchforks:

You can see that we bottomed (so far) right at the median line of this fork. If things are truly bearish we ought to see this get broken to the downside at some point.

In the meantime, I've added a turquoise fork given the breakdown out of the black one. I would hope to see the current rally from the low get pushed back from around where we are now, at the median line of the black fork, but certainly by the upper line of the black fork at most. A rally much higher would start to raise questions about the immediately bearish case of a i-ii-[1]-[2] down which now has us in [3] of iii.

On my labelling, the count shown in the 1 min chart in my last post won't be invalidated unless this current rally which I would label as wave (4) of [3] ends above the wave (1) of [3] low at 1063.63 [EDIT: SORRY - should have said 1069.63!]. However, I'll be keeping a close eye on these forks for any earlier signs that that low might get taken out.